Survey: Real estate continues to be most favored investment as stock appeal wanes

Real estate continues to be the most favorable long-term investment option among Americans, according to a traditional Gallup poll. The survey found a major drop in the share of respondents considering the stock market to be a good investment, reflecting the steep drop in the stock market during the COVID-19 pandemic. The share of respondents favoring real estate investment was also more than twice the share of respondents who preferred gold or savings accounts.

In the annual Economy and Personal Finance survey, which polled 1,017 people in the first two weeks of April, 35 percent said they considered real estate to be the best long-term investment when presented with this option, bonds, gold, savings accounts or CDs, and stocks or mutual funds. The share considering real estate to be the best investment has stayed relatively unchanged since 2016.

Twenty-one percent said they consider stocks and mutual funds to be the best investment option, down 6 percentage points from the previous year. This also marked the lowest share since 2012.

Seventeen percent believed savings accounts and CDs to be the best investment option, while 16 percent favored gold. Just 8 percent thought bonds were an optimal long-term investment. However, Gallup noted how there has been a collective 7 percentage point increase in respondents favoring these non-stock options compared to 2019.

Middle-income respondents' outlook on the stock market was relatively unchanged, while those in the highest and lowest income ranges viewed stocks less favorably. One-quarter of those earning $40,000 to $99,999 a year thought stocks were the best investment option, down just 1 percentage point from the previous year. Thirty-one percent of those earning $100,000 or more, along with 12 percent of those earning less than $40,000, considered stocks to be the best long-term investment – down 9 percentage points from the previous year in both groups.

Stock ownership remained stable, with 55 percent saying they were invested in the stock market through a stock, mutual fund, IRA, or 401(k). This share was unchanged since 2018, but remained lower than pre-recession levels.

Over the course of the survey's history, respondents have varied on whether they considered investing in the stock market to be a good idea or a bad one. A peak of 58 percent in 1999 said they considered it would be a good idea to invest in the market if they had $1,000 to spend, but following the dot-com bust this trend reversed and 60 percent said they thought stock market investment was a bad idea. Respondents were split on the question of investing in the stock market in the following years, but the survey issued after the 2008 stock market crash found that 62 percent of respondents believed stocks were a bad investment.

Respondents have been evenly divided in the past decade on whether it would be a good idea or bad idea to invest in the stock market if they had $1,000 to spend. In the most recent survey, 49 percent considered it a bad idea while 48 percent thought it was a good idea. Those with higher incomes or with money already invested in the market were most likely to consider stocks a good investment.

At the height of the Great Recession, gold was the preferred investment option as respondents generally considered real estate and stocks to be too risky. In 2011, 34 percent thought gold was the best long-term investment, while 19 percent named real estate and 17 percent named stocks. Gold remained the top choice in 2012, but real estate regained the top spot in 2012.

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